Laviolettes sue Bank of America alleging fraud in mortgage proposal

FLYERS COACH Peter Laviolette recently filed a $3 million lawsuit alleging fraud against Bank of America.

The lawsuit, filed in Palm Beach County Circuit Court, alleges that Bank of America convinced Laviolette and his wife, Kristen, to mortgage three of his properties in an "investment scheme that would build great wealth with minimum risk."

The suit was first reported by Courthouse News. Through a Flyers spokesman, Laviolette declined to comment to the Daily News last night.

According to the suit, Laviolette was first approached by Banc of America Securities - a Bank of America subsidiary - shortly after winning the Stanley Cup as coach of the Carolina Hurricanes in 2006. At the time, and currently, the Laviolettes owned their house in Raleigh, N.C., and two properties in Florida.

Bank of America's 12-page proposal presented to the Laviolettes advised them to "leverage all of the available equity in their properties" through "several high-interest loans and then to invest these proceeds in other purportedly sound, but ultimately, high-risk investments."

The proposal was projected to increase the Laviolettes net worth from $8.1 million to $22.0 million in a span of 30 years, the complaint states.

According to the suit, the bank's projections included additional monthly fund injections, but relied on "artificially inflated values for their properties" and "not only failed to produce the projected high rate of return needed to cover the loan interest, they utterly collapsed, resulting in a loss of the principal as well."

In addition to seeking $3 million in damages, the Laviolettes are seeking rescission of all three loans.

Laviolette, 49, has been the coach of the Flyers since December 2009. He signed a "multiyear" contract extension on Aug. 1, 2012, that is expected to take him through the 2014-15 season.

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